Company Quick10K Filing
Free Flow
Price-0.00 EPS-0
Shares26 P/E0
MCap-0 P/FCF0
Net Debt-0 EBIT-0
TEV-0 TEV/EBIT0
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-12
10-K 2019-12-31 Filed 2020-04-10
10-Q 2019-09-30 Filed 2019-11-14
10-Q 2019-06-30 Filed 2019-08-07
10-Q 2019-03-31 Filed 2019-05-20
10-K 2018-12-31 Filed 2019-04-29
10-Q 2018-09-30 Filed 2018-11-19
10-Q 2018-06-30 Filed 2018-08-15
10-Q 2018-03-31 Filed 2018-05-15
10-K 2017-12-31 Filed 2018-04-02
10-Q 2017-09-30 Filed 2017-11-20
10-Q 2017-06-30 Filed 2017-08-21
10-Q 2017-03-31 Filed 2017-05-24
10-K 2016-12-31 Filed 2017-04-03
10-Q 2016-09-30 Filed 2016-11-21
10-Q 2016-06-30 Filed 2016-08-08
10-Q 2016-03-31 Filed 2016-05-31
10-K 2015-12-31 Filed 2016-04-22
10-Q 2015-09-30 Filed 2015-11-20
10-Q 2015-06-30 Filed 2015-08-19
10-Q 2015-03-31 Filed 2015-06-22
10-K 2014-12-31 Filed 2015-04-15
10-Q 2014-09-30 Filed 2014-11-19
10-Q 2014-06-30 Filed 2014-09-09
10-Q 2014-03-31 Filed 2014-05-20
10-K 2013-12-31 Filed 2014-03-11
10-Q 2013-09-30 Filed 2013-11-08
10-Q 2013-06-30 Filed 2013-08-12
10-Q 2013-03-31 Filed 2013-05-14
10-K 2012-12-31 Filed 2013-02-08
10-Q 2012-09-30 Filed 2013-03-15
8-K 2018-06-12

FFLO 10Q Quarterly Report

Item 1. Financial Statements
Note 1 - Basis of Presentation
Note 2 - Going Concern
Note 3 - Incorporation of Subsidiary
Note 4 - Related Party
Note 5 - Capital Stock
Note 6 - Subsequent Events
Item 2. Management's Discussion and Analysis or Plan of Operation
Item 3. Quantitative and Qualitative Disclosures About Market Risks
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factor
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosure
Item 5. Other Information
Part II. Other Information
Item 6. Exhibits.
EX-31.1 fflo_ex31z1.htm
EX-31.2 fflo_ex31z2.htm
EX-32.1 fflo_ex32z1.htm
EX-32.2 fflo_ex32z2.htm

Free Flow Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
2.41.81.20.70.1-0.52012201420172020
Assets, Equity
0.20.10.10.0-0.0-0.12012201420172020
Rev, G Profit, Net Income
0.50.30.1-0.0-0.2-0.42012201420172020
Ops, Inv, Fin

Free Flow, Inc. - Form 10-Q SEC filing
0001543652 --12-31 false false 2020 Q1 false 0001543652 2020-01-01 2020-03-31 0001543652 2020-03-31 0001543652 2020-05-12 0001543652 2019-03-31 0001543652 2019-12-31 0001543652 us-gaap:SeriesBPreferredStockMember 2020-03-31 0001543652 us-gaap:SeriesBPreferredStockMember 2019-12-31 0001543652 us-gaap:SeriesBPreferredStockMember 2019-03-31 0001543652 us-gaap:SeriesCPreferredStockMember 2020-03-31 0001543652 us-gaap:SeriesCPreferredStockMember 2019-12-31 0001543652 us-gaap:SeriesCPreferredStockMember 2019-03-31 0001543652 us-gaap:PreferredClassAMember 2020-03-31 0001543652 us-gaap:PreferredClassAMember 2019-12-31 0001543652 us-gaap:PreferredClassAMember 2019-03-31 0001543652 2019-01-01 2019-03-31 0001543652 2019-01-01 2019-12-31 0001543652 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001543652 us-gaap:CommonStockMember 2019-12-31 0001543652 us-gaap:PreferredStockMember 2019-12-31 0001543652 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001543652 us-gaap:RetainedEarningsMember 2019-12-31 0001543652 us-gaap:CommonStockMember 2020-03-31 0001543652 us-gaap:PreferredStockMember 2020-03-31 0001543652 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001543652 us-gaap:RetainedEarningsMember 2020-03-31 0001543652 2018-12-31 0001543652 fil:PromedaffIncMember 2015-02-01 2015-02-28 0001543652 fil:GsPharmaceuticalsIncMember 2014-12-31 0001543652 fil:GsPharmaceuticalsIncMemberus-gaap:SeriesBPreferredStockMember 2014-12-31 2014-12-31 0001543652 fil:RedfieldHoldingsLtdMemberus-gaap:ConvertibleNotesPayableMember 2015-03-01 2015-03-31 0001543652 fil:RedfieldHoldingsLtdMember 2015-03-01 2015-03-31 0001543652 fil:UnnamedEntityMember 2018-12-31 0001543652 fil:UnnamedEntityMemberus-gaap:SeriesCPreferredStockMember 2018-12-31 2018-12-31 0001543652 2019-04-02 2019-04-02 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2020

Commission file number 000-54868

Free Flow, Inc.
(Exact name of registrant as specified in its charter)

Delaware

 

45-3838831

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

6269 Caledon Road,

King George, VA 22485

(Address of Principal Executive Offices)

 

(703) 789-3344

(Registrant’s Telephone Number)

----------------------------------------------------

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes [X ] NO [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X ] NO [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer, "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

          Large accelerated filer   [   ]         Accelerated filer   [   ]

                          Non-accelerated filer   [   ]             Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES NO [X]


State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  26,221,000 shares as of May 12, 2020


 

Table of Contents

ITEM 1.  FINANCIAL STATEMENTS4 

Notes to Condensed Consolidated Financial Statements10 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION12 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS14 

ITEM 4. CONTROLS AND PROCEDURES14 

PART II – OTHER INFORMATION15 

ITEM 1. LEGAL PROCEEDINGS15 

ITEM 1A. RISK FACTOR15 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS15 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES15 

ITEM 4. MINE SAFETY DISCLOSURE15 

ITEM 5. OTHER INFORMATION15 

PART II. OTHER INFORMATION16 

ITEM 6.     EXHIBITS.16 

SIGNATURES16 


ITEM 1.  FINANCIAL STATEMENTS

 

FREE FLOW, INC.

Balance Sheet

 

 

 

 

 

 

 

 

 

As of

 

As of

 

As of

 

 

March 31,

 

March 31,

 

December 31,

2020

 

2019

 

2019

 

 

(Unaudited)

 

(Unaudited)

 

(Audited)

 

ASSETS

Current Assets

 

 

 

 

 

 

Cash in hand and bank

$10,141  

 

$2,775  

 

$7,226  

 

Trade Receivables - current

77,563  

 

18,526  

 

107,091  

 

Other Receivables - Staff /Intra-company

8,850  

 

 

 

6,073  

 

Rounding off decimal error

 

 

 

 

(2) 

 

Advance for Inventory Purchases

28,000  

 

 

 

 

 

Deposit for Sales' leads

20,000  

 

 

 

 

 

Inventory

840,156  

 

594,670  

 

776,588  

 

 

 

 

 

 

TOTAL CURRENT ASSETS

984,711  

 

615,971  

 

896,976  

 

 

 

 

 

 

Fixed Assets

 

 

 

 

 

 

Land and Building

776,704  

 

773,513  

 

776,704  

 

Less: Accumulated depreciation

(90,230) 

 

(30,901) 

 

(90,230) 

 

 

 

 

 

 

TOTAL FIXED ASSETS

686,474  

 

742,612  

 

686,474  

 

 

 

 

 

 

Other Assets

 

 

 

 

 

 

Delivery Trucks, at cost

3,500  

 

3,500  

 

3,500  

 

Less: Accumulated depreciation

(2,895) 

 

(2,492) 

 

(2,895) 

 

Furniture

100  

 

 

 

100  

 

Equipment

35,000  

 

35,000  

 

35,000  

 

Accumulated depreciation

(11,032) 

 

(7,000) 

 

(11,032) 

 

 

 

 

 

 

 

TOTAL OTHER ASSETS

24,673  

 

29,008  

 

24,673  

 

 

 

 

 

 

 

 

TOTAL ASSETS

$1,695,858  

 

$1,387,591  

 

$1,608,123  

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities

 

 

 

 

 

 

Accounts Payable

11,677  

 

21,468  

 

11,687  

 

PayPal

60,206  

 

 

 

 

 

Notes payable - related parties

10,343  

 

56,033  

 

10,343  

 

 

 

 

 

 

 

TOTAL CURRENT LIABILITIES

82,226  

 

77,501  

 

22,030  

 

 

 

 

 

 

 

Long Term Liabilities

 

 

 

 

 

 

Loan - secured

885,520  

 

898,595  

 

889,340  

 

PayPal Advance

 

 

 

 

10,857  

 

Line of Credit

328,012  

 

 

 

311,012  

 

 

 

 

 

 

 

TOTAL LONG TERM LIABILITIES

1,213,532  

 

898,595  

 

1,211,209  

 

 

 

 

 

 

 

Total Liabilities

1,295,758  

 

976,096  

 

1,233,239  

 

 

 

 

 

 

 

Redeemable Preferred Stock

 

 

 

 

 

 

Series B; 500,000 shares authorized, 330,000 and 0 issued and outstanding as of March 31, 2020 (Classified as Mezzanine equity)

330,000  

 

330,000  

 

330,000  

 

Series C; 500,000 shares authorized, 470,935 and 0 issued and outstanding as of March 31, 2020 (Classified as Mezzanine equity) - As equity in Accurate

470,935  

 

470,935  

 

470,935  

Stockholders' (Deficit)

 

 

 

 

 

 

Preferred stock ($0.0001) par value, 20,000,000 shares authorized 10,000 shares part value $0.0001 Class A issued on March 31, 2020 and December 31, 2019

1  

 

1  

 

1  

Additional Paid in capital

 

 

 

 

 

 

Common Stock, ($0.0001 par value 100,000,000 shares authorized 26,200,000 shares issued and outstanding as of March 31, 2020 and December 31, 2019

2,622  

 

2,620  

 

2,620  

 

 

 

 

 

 

 

Additional paid-in capital

131,033  

 

114,545  

 

131,033  

Current Period - Profit

25,214  

 

(34,405) 

 

 

Accumulated Deficit

(559,705) 

 

(472,201) 

 

(559,705) 

 

 

 

 

 

 

 

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)

(400,835) 

 

(389,440) 

 

(426,051) 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES & STOCKHOLDERS' (DEFICIT)

$1,695,858  

 

$1,387,591  

 

$1,608,123  

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements


 


 

 

Free Flow, Inc.

Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

3 months

 

3 months

 

 

 

 

 

 

Ended

 

Ended

 

 

Year Ended

 

 

 

March 31,

 

March 31,

 

 

December 31,

 

2020

 

2019

 

 

2019

 

 

(Un-audited)

 

(Un-audited)

 

 

(Audited)

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

Sales

 

$116,379  

 

$58,784  

 

 

$420,538  

 

 

 

 

 

 

 

 

 

TOTAL REVENUES

 

116,379  

 

58,784  

 

 

420,538  

COST OF GOODS SOLD

 

33,622  

 

24,772  

 

 

111,745  

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

82,757  

 

34,012  

 

 

308,793  

 

 

 

 

 

 

 

 

 

GENERAL AND ADMINISTRATIVE EXPENSES

 

 

 

 

 

 

 

 

General & Administrative Expenses

 

121,112  

 

68,418  

 

 

430,604  

 

Depreciation Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSES (INCOME)

 

(63,569) 

 

-  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Expenses  

 

57,543  

 

68,418  

 

 

430,604  

 

 

 

 

 

 

 

 

 

Net Profit (Loss)

 

25,214  

 

(34,405) 

 

 

(121,811) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET PROFIT (LOSS)

 

$25,214  

 

($34,405) 

 

 

(121,811) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIS INCOME (LOSS)  PER SHARE

 

(0.01) 

 

(0.01) 

 

 

(0.01) 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

 

 

26,221,000.00

 


 

 

FREE FLOW, INC.

Statement of  Changes in Shareholders' (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMON

STOCK

 

PREFERRED STOCK

 

ADDITIONAL PAID-IN

 

ACCUMULATED

 

 

SHARES

 

AMOUNT

 

SHARES

 

AMOUNT

 

CAPITAL

 

DEFICIT

 

TOTAL

 

 

 

 

 

Series -A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2019

26,221,000

 

2,622

 

10,000

 

1 

 

131,033

 

(559,705)

 

(426,051)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the quarter ended March 31, 2020

 

 

 

 

 

 

 

 

 

 

25,214 

 

25,214 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, MARCH 31, 2020

26,221,000

 

2,620

 

10,000

 

1 

 

131,033

 

(534,491)

 

(400,835)

 


 

 

 

FREE FLOW, INC. & SUBSIDIARY ACCURATE AUTO PARTS, INC.

Statements of Cash Flow

 

 

 

 

Period  

 

Year  

 

 

 

 

Ending

 

Ended

 

 

 

 

March 31,

 

December 31,

 

2020

 

2019

 

 

 

 

 

 

 

CASH FLOW FROM OPERATING ACTIVITIES

 

 

 

 

NET PROFIT (LOSS)

 

$25,214  

 

$(121,811) 

Depreciation allowance

 

 

 

 

 

(Increase) in Other Assets  

 

 

 

59,473  

 

Increase in Trades Payable

 

29,520  

 

4,219  

 

(Increase) Advance for Inventory Purchases

 

(30,779) 

 

18,963  

 

(Increase) Trade Receivables

 

(20,000) 

 

 

 

(Increase) Decrease in Inventory

 

(63,568) 

 

(205,328) 

 

 

NET CASH USED IN OPERATING ACTIVITIES

 

$(59,614) 

 

$(349,450) 

 

 

 

 

 

 

 

CASH FLOW FROM FINANCING ACTIVITIES

 

 

 

 

 

Proceeds from notes payable - related parties

 

 

 

9,963  

 

Proceeds from Line of Credit

 

17,000  

 

311,012  

 

Proceeds from Pay Pal Advance

 

49,349  

 

10,857  

 

Proceeds from Loan from River Valley Bank

 

(3,820) 

 

(10,760) 

 

Proceeds from Subscription Money

 

 

 

16,487  

 

Rounding off the decimals - error

 

 

 

2  

 

(Increase) in Fixed Assets - Land, Building

 

 

 

 

 

Proceeds from Accounts Payable - trade (Decrease in Accounts Payable)

 

 

 

 

 

 

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

 

$62,529  

 

337,561  

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

2,915  

 

(11,889) 

 

 

 

 

 

 

 

CASH AT BEGINNING PERIOD

 

7,226  

 

19,115  

 

 

 

 

 

 

 

CASH AT END PERIOD

 

$10,141  

 

$7,226  

 


 

Free Flow, Inc.

Notes to Condensed Consolidated Financial Statements

 

March 31, 2020

 

(Unaudited)

 

NOTE 1 – BASIS OF PRESENTATION

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2020 and the results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on April 10, 2020.

 

NOTE 2 - GOING CONCERN

 

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has established itself as a stable ongoing business entity with established revenues sufficient to cover its operating costs and allow it to continue as a going concern. However, the ability of the Company to continue as a going concern is also dependent on the Company obtaining adequate Sales so that the Company can liquidate its inventories and continue as a going business.

 

In order to continue as a going concern, the Company will need, among other things, Sales of its product lines. Management has obtained such sales through Internet sales and marketing companies who specialize in promotion of such businesses. Management is no longer obtaining capital from management and significant shareholders to meet its minimal operating expense and is meeting such expenses from cash flow from sales.  However, management cannot provide an assurance that the Company will be continue operating successfully in accomplishing any of its plans, especially in view of un-certain circumstances prevailing due to COVID 19.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually fulfill the secured purchase orders to attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

NOTE 3 – INCORPORATION OF SUBSIDIARY

 

In February 2015, the company incorporated a subsidiary, Promedaff, Inc. and purchased a skin care product line and formulations for $2,000,000 against a promissory note. An e commerce platform was set up for sales and marketing. The efforts did not bear any success and the entire inventory was sold through the Seller and the Promissory Note was cancelled and marked “VOID”. The name of this entity has been changed to Motors & Metals, Inc. and has remained inactive but is in good standing. Motors & Metals, Inc. operates as a separate entity to conduct business in refurbishing automotive engines and selling metals recovered from its Auto Parts facility, and have an independent profit center. The company continued its research on the related subjects and has finally come up with a plan to expand its automobile crushing business to shredding automobiles and recover steel to sell to


buyers overseas who have already signed letter of intent to purchase 3,000 metric tons of shredded steel per months.  Progress discussed below under “Plan of Operation” in section marked “Item 2”.

 

As reported in 10Qs for the earlier quarters as well as in 10Ks for the Annual reports, on February 4, 2016 the company incorporated another subsidiary in the State of Virginia under the name JK Sales, Corp. (on December 7, 2017 the name was changed to Accurate Auto Parts, Inc.)  and has since remained in the business of buying end of life and salvage vehicles and selling auto parts.

 

On April 17, 2018 the company incorporated in Virginia, another subsidiary named Accurate Investments, Inc. with the objectives of acquiring real estate property, which plan did not materialize. Accurate Investments, Inc. has pursued other business opportunities that are discussed under subsequent events in note 6 below.

 

On January 4, 2017 the company incorporated in Virginia another subsidiary named City Autos, Corp. with the objective of operating a auto dealership but this entity remained inactive due to lack of qualified personnel. The company is now in the process of negotiations with a qualified operator and expects to begin the licensing process in very near future.

 

NOTE 4 – RELATED PARTY

 

As of December 31, 2019, the Company had notes payable in the amount of $10,343 to Redfield Holdings, Ltd. a related party. During the three months ended the Company the amount owed is unchanged. The note is unsecured and does not bear any interest and has a maturity date of December 30, 2020.

 

NOTE 5 – CAPITAL STOCK

 

The Company has authorized 100,000,000 shares of common shares with a par value of $0.0001 per shares and 20,000,000 shares of preferred stock, with a par value of $0.0001 per shares.

 

Pursuant to the resolution of the shareholders meeting held on March 30, 2015 the Company designated 500,000 shares of the preferred authorized shares as preferred shares – Series “B” shares. The preferred shares – Series “B” were assigned the following preferences:

 

a)Each share to carry one vote. 

 

b)Each share will be redeemable with a 365 days written notice to the company. 

 

c)Each share will be junior to any debt incurred by the Company.  

 

d)The redemption value will be the par value at which such “preferred shares – series B” are bought by the subscriber. 

 

e)Each share will carry a dividend right at par with the common shares. 

 

On December 31, 2014 the Company had a Note outstanding in the principal amount of $330,000 plus interest payable to GS Pharmaceuticals, Inc. By mutual consent this note and accrued interest was converted to 330,000 preferred shares – Series “B”.

 

On March 31, 2015 an amount of $58,000 was subscribed by Redfield Holdings, Ltd. by cancellation of a Note against the issuance of 9,700 shares of preferred shares – Series “A”. These shares were issued to Redfield Holding, Ltd. thus making a total of entire designated preferred shares – Series “A” shares to Redfield Holdings, Ltd. Each share of preferred shares – Series “A” carries voting right equal to 10,000 common shares.

 

On March 31, 2017 total preferred shares issued and outstanding are 10,000 Series “A” and 330,000 Series “B”.

 

On December 31, 2018 the Company had a Note outstanding in the principal amount of $470,935; by mutual consent this note and accrued interest was converted to 470,935 preferred shares - Series “C”.


 

On April 2, 2019, the Company accepted subscription in the amount of $14,490 against issuance of 21,000 common shares this bringing the total number of common shares issued and outstanding to 26,221,000.

 

NOTE 6 – SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through the date which the financial statements were available to be issued. Based on the evaluation there occurred a material event that require recognition in or disclosure to the financial statements. The Company has received confirmation from the bank that has made loan against the property and has made available a working line of credit that it will freeze payments of mortgage and interest on both loans for a period of six month beginning April 2020. In addition to this accommodation the bank has also confirmed availability of $27,800 of loan under the Paycheck Payment Program for a period of two years at an annual interest rate of 1%.

 

The Company is still open for business, but the sales are down by more than 50%.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR UNAUDITED FINANCIAL STATEMENT SAND NOTES THERETO INCLUDED HEREIN. IN CONNECTION WITH, AND BECAUSE WE DESIRE TO TAKE ADVANTAGE OF, THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WE CAUTION READERS REGARDING CERTAIN FORWARD LOOKING STATEMENTS IN THE FLOWING DISCUSSION AND ELSEWHERE IN THE THIS REPORT AND IN ANY OTHER STATEMENT MADE BY, OR AN BEHALF, WHETHER OR NOT IN FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, FORWARD-LOOKING STATEMENTS ARE STATEMENT NOT BASED ON HISTORICAL INFORMATION AND WHICH RELATE TO FUTURE OPERATIONS, STRATEGIES, FINANCIAL RESULTS OR OTHER DEVELOPMENTS. FORWARD-LOOKING STATEMENTS ARE NECESSARILY BASED UPON ESTIMATES AND ASSUMPTIONS THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES, MANY OF WHICH ARE BEYOND OUR CONTROL AND MANY OF WHICH, WITH RESPECT TO FUTURE BUSINESS DECISIONS, ARE SUBJECT TO CHANGE, THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT ACTUAL RESULTS AND COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FORM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS AND COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING STATEMENTS MADE BY, OR ON OUR BEHALF, WE DIS TO UPDATE FORWARD-LOOKING STATEMENTS.


 

PLAN OF OPERATION  

Accurate Auto Parts, Inc. the Company’s used auto parts subsidiary continues its business to purchase end of life and wrecked vehicles and grow its business.

 

Motors & Metals, Inc. the Company’s subsidiary for processing of scrap metal, upon receiving a revalidation of its zoning from the Town Authorities applied for State license to operate as “Scrap Metal Processor”. This was granted in early January of 2020; it is worth mentioning here that the Company already had such license under its subsidiary namely Accurate Auto Parts, Inc. The State enacted new regulations whereby auto recycling facilities could no longer operate as “scrap metal processor” thus the Company opted to apply for another license independent of Accurate Auto Parts, Inc.

Thereafter, the management began its process to contact machinery manufactures in the USA and abroad, several offers and indication have been received. The CEO made arrangements to visit a few existing plants in the USA through the arrangements made by the leading machinery manufacturers. Also, a few plant manufacturers made physical visit to the company location to evaluate the environment and logistics. The company then retained the services of a qualified consultant/executive with several years of experience in management and production of such facilities in the USA.

Feasibility report has been prepared and comparative analysis has been conducted to arrive at the most practical conclusion. It has thus been determined that the Company will to go ahead and expand its scrap metal processing.

Financial arrangements for capital expenditure are being sought, in view of the positive forecasts of earnings and sales, the Company expects that financing will be available.

 

RESULTS OF OPERATIONS

The Company did recognize revenue for a sum of $116,379 during the three months ended March 31, 2020 and $58,784 of revenues during the three month ended March 31, 2019. While the net revenues for the period ended March 31, 2020 were higher by $ $57,595 than for the same period during 2019, the Cost of Goods Sold was also higher by $8,850 during the period ended March 31, 2020 as compared to the same period during 2019. The general and administrative expenses for the period ended March 31, 2020 were $121,112 as compared to $68,418 for the same period during 2019. The additional sum of $52,694 is attributed to additional costs and expenses that have been incurred for hiring additional production and management employees.  

During the three months ended March 31, 2020 the company recognized a net profit of $25,214 as compared to a loss of $34,405 for the corresponding period in the year 2019, thus recognizing a significant increase in profit as compared to the three months ended March 31, 2019.

The increase in profits is a result of an increase in sales and a reduction in cost of sales due to better controls and improvement in efficiency of dismantling.

 

LIQUIDITY

THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S REPORT ON THE COMPANY’S FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019, AND FOR EACH OF THE PRECEDING YEARS THEN ENDED, INCLUDES A “GOING CONCERN” EXPLANATORY PARAGRAPH, THAT DESCRIBES SUBSTANTIALLY DOUBT ABOUT THE COMPANY’S ABILITY TO CONTINUE AS A GOING CONCERN.

On March 31, 2020 the Company had total current assets of $1,695,858 consisting of $10,141 in cash and $77,563 in trade receivables, $840,156 in inventory of auto parts, $28,000 as advance for purchase of automobiles, and $20,000 deposit for leasing data base for leads of prospective clients; as compared to March 31, 2019 which were: total assets of $615,971 consisting of $2,775 in cash and $18,526 in trade receivables, and $594,670 in inventory comprising of automobile parts and accessories.


 

LINE OF CREDIT RECEIVED AND FURTHER ANTICIPATED

The Company does have cash sufficient to meets its cash needs. Incredible Bank (f/k/a River Valley Bank), extended a line of credit for a sum of $350,000 for working capital. If market conditions had remained the same and no adverse circumstances had occurred the company was adequately funded to meet its budgeted plan of operations, but now due to Coronavirus the Company is uncertain if its existing cash flow will suffice the cash requirements. The Company has substantial surplus value in its inventory and in the land it owns; thus an additional loan/line of credit might be justified.   

 

REVENUE RECOGNITION

The Company recognizes revenues on arrangements in accordance with Securitas and Exchange Commission Staff Accounting Bulletin Topic 13, REVENUE RECOGNITION and FASB ASC 605-15- 25, REVENUE RECONGNITION. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonable assured. The Company reported gross revenues of $340,148 for the year ending December 31, 2017.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Not Applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

Management's Report on Disclosure Controls and Procedures

Management is responsible for establishing and maintaining adequate internal control so as to

(1)  maintain the records  in reasonable detail, which will accurately and fairly reflect the transactions and dispositions of the Company's assets;

(2) to provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Company's receipts and expenditures are  made  within the delegated authority ; and

(3) to provide reasonable assurance for the  prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on company’s financial statements.

However, the management asserts that the company did not have any accounting staff due to limited financial resources though now has plans to recruit gradually.  Also, this company does not have a well written document on accounting policies and procedures, though has plans to have them shortly.  Consequently, this can result in possible errors in the presentation and disclosure of financial information in our annual, quarterly, and other filings.

The SIC Code of 1700 as showing in Edgar for this company is no longer valid, since this company is now dealing with the auto parts, as OEM Recycled Auto Parts. Segregation of duties is an important factor in Internal Control.  Though it is achieved to a certain extent, the management is committed to strengthen the internal controls effectively in the coming months.  

The company promoted two of its senior managers to become executive directors thus taking on greater responsibilities and deserving greater rewards. Both of these individuals have over 25 years’ experience in auto parts industry.


Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal controls over financial reporting that occurred during the period ended March 31, 2020, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None.

 

ITEM 1A. RISK FACTOR

Not Applicable to Smaller Reporting Companies.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the period of January 1, 2015 and March 31, 2015, the Company issued 9,700 shares of Preferred Shares – Series “A” for a sum of $58,000 and 330,000 shares of Preferred Shares – Series “B” for a sum of $330,000 which were the result of conversion of certain debts of the company.

During the period of April 2019 the Company accepted a subscription of $14,490 against issuance of 21,000 restricted common shares.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

 

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable

 

ITEM 5. OTHER INFORMATION


 

PART II. OTHER INFORMATION

ITEM 6.     EXHIBITS.

The following exhibits are included with this quarterly filing.  Those marked with an asterisk and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our original Registration Statement on Form S-1, filed under SEC File Number 000-54868, at the SEC website at www.sec.gov:

 

Exhibit No.Description 

 

3.1Articles of Incorporation

3.2Bylaws

31.1Sec. 302 Certification of Principal Executive Officer 

31.2Sec. 302 Certification of Principal Financial Officer 

32.1Sec. 906 Certification of Principal Executive Officer 

32.2Sec. 906 Certification of Principal Financial Officer 

101      Interactive data files pursuant to Rule 405 of Regulation S-T 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

Free Flow Inc.

 

 

Registrant

 

 

 

Dated May 12, 2020

 

By: /s/ Sabir Saleem

 

 

 

 

 

Sabir Saleem, Chief Executive Officer,

 

 

Chief Financial and Accounting Officer